Economics From a Catholic Perspective

Economics From a Catholic Perspective

“At first I thought I would write about ethical issues in economics, but my first article was rejected by my editor. He said to me: ‘If you want to write about morality, this is the wrong newspaper! I want articles and comments of a technical nature!’ From that day I changed my way of writing. And after writing for 30 years for Sole 24 ore (the leading Italian financial daily), I began to write there about ethics, and about technical questions for L’Osservatore Romano.”

Ettore Gotti Tedeschi, financier and banker, in the autumn of 2007 began writing editorials for the Vatican newspaper. And he still does today, though in 2009 he was appointed president of the Holy See’s Institute for Works of Religion, the IOR. This was a real innovation for the Vatican—so much so that the Vatican Publishing House has decided to collect in one volume all his articles from December 2007 to November 2011. Short, incisive, technical and yet popular at the same time, the texts are often scathing.

ITV met Gotti Tedeschi at his office in the Vatican, but the president of the IOR does not like to talk about the activities of the Vatican bank. His favorite subject, instead, is the Pope’s June 29, 2009, encyclical Caritas in Veritate.

Ettore Gotti Tedeschi, head of the Vatican bank, is pictured during a meeting in Rome March 3, 2010 (CNS photo)

The encyclical Caritas in Veritate is one of the recurring themes of your articles. Why?

Ettore Gotti Tedeschi: First, because it is the very first en­cyclical on globalization. Caritas in Veritate is a true manual to find out why there was a crisis [in 2008], how it developed and how it ended. I also had the privilege of offering Cardinal Bertone some thoughts on what was happening as the encyclical was being written.

How do you choose the topics of your articles?

Gotti Tedeschi: The choice of themes has always been shared with the editor (of L’Osservatore Romano, Gianmaria) Vian, with whom I discuss the themes and timing of my articles.

There are reflections on the crisis that largely anticipated the facts…

Gotti Tedeschi: I am a concrete and practical economist. Don’t forget that for 20 years I’ve been the president of the Italian unit of one of the largest banks in the world. For 10 years I have been an independent board member of the Italian government’s bank, the Deposits and Loans Fund. I am chairman of the Infrastructure Fund created by the Italian government (F2I). This has developed my attention and enhanced my participation in centers of reflection and decision that were precious to me. I am not an academic, a theorist.

Is the crisis due to speculation? To lack of ethics? To politics?

Gotti Tedeschi: I answer referring to Caritas in Veritate. The encyclical does not merely say that the origin of the crisis is of a moral character, a lack of ethical behavior. It says much more. The origin of the crisis is nihilism. The nihilistic man is a man who has lost touch with underlying values. So he is truly lost. A man who is lost and is not strongly anchored in underlying values cannot give true meaning to instruments. The instrument is a means, not an end. What are the purposes? If the nihilistic man loses his conviction that there are underlying values, he allows the tools to take moral autonomy and become the ends.

The encyclical will never be presented enough. Everyone should have the opportunity to hear about Caritas in Veritate in depth, and not only from experts, but also from people who understand and love what it says and see the Pope as the only moral authority in the world able to confront the question of what is good and bad for all of humanity, even for those who are not Catholic.

The encyclical concludes by saying: to get out of this crisis, it is not enough to reformulate the tools, it is necessary to change man. It is man who uses the tools. The tools can be good, bad, perfect or imperfect, but the man who knows how to use them turns them into means for the common good.

But to whom are your essays directed? To ordinary people? To the educated? Do you give practical guidance to the lady who goes grocery shopping at the market?

Gotti Tedeschi: In my writings, I always try to conform my style to the rest of the publication. I believe that the same complex argument can be adequately explained both to the scientist and to the housewife who goes to the grocery store. The fact of making it clear is a skill, an effort. But it is not a question of choosing to speak only to a segment, high or low. The question is of being clear. And this has always been the effort that I was asked to make from the beginning.

Benedict XVI speaks at the United Nations in New York on April 18, 2008. In his 2009 encyclical, Caritas in Veritate (“Charity in Truth”), the Pope called for the reform of the United Nations as well as of international bodies involved in economics and finance (Galazka photo)

Gotti Tedeschi: The idea came from the head of the Vatican Publishing House, Father Giuseppe Costa. I am honored.

I dedicated the book to the Holy Father, for I wrote all the articles thinking about him, to honor the thought of the Holy Father and to exalt his encyclical Caritas in Veritate. So to collect them was an extraordinary privilege. The topics follow the evolution of the economic situation during the past three years. They were selected from day to day, to help the reader understand what was happening, not necessarily because the reader then should make decisions. But what is happening in the economy of various markets also matters when you need to make choices of an apostolic character or to make moral judgments.

It is true, the nihilistic morality of culture has resulted in the misuse of instruments. This in turn has effects of a moral character. So the lack of morality or the strength of morality determines the use of the instruments, and the use of instruments provokes effects of a moral character. Consequently, the evolution of the times, the circumstances, and the application of the tools should be well understood by those involved in ministry in a broad sense, and by those who want to understand how the great changes of this world are being modelled.

But to whom are your articles actually directed?

Gotti Tedeschi: Economic decisions at various levels are taken by government members, bankers, heads of institutions, business leaders. On what basis do they make their decisions? According to an aim, or at least they should. The government should strive for the common good, the head of a large institution should influence the common good, and so forth.

If man has no sense of the meaning of life, how can he give meaning to his use of his instruments? How can the politician, the banker, the industrialist, make sense of his role if for him life has no meaning?

It is clear: if life does not make sense, there is no point in blaming the banker if he does not use his tools in a meaningful way. So who teaches the meaning of life to the politician, the banker, the industrialist? The priest. The person who teaches doctrine, who gives spiritual direction, whose faith influences the need for each of us to have the answers that make sense.

So if this book incorporates articles written in the Pope’s newspaper and apparently addressed to priests, bishops, etc., in fact, it is addressed to the managers of managers.

These articles have often been cited in the press, but has there also been some feedback from the economic and financial world?

Gotti Tedeschi: Yes, it has happened often, but the real pleasure is not a compliment, but to have persuaded someone that certain issues are important. I know I have convinced politicians and economists on the issues of birthrate linked to economic development. And this is a triumph for me. Ten years ago when I said that the origin of the crisis was the collapse of the birthrate, being still in a neo-Malthusian period, people treated me badly. Today, many say that I am right. This is the real success of this effort. And in part I owe it to L’Osservatore Romano. I could not have found a better place, because L’Osservatore Romano is on the tables of the most important politicians in the world, decision-makers, etc. It is read by those who count. Then it is clear that the composition of the texts should be consistent with the people who then read them.

The Church’s social doctrine has different schools and currents. You have focused on Caritas in Veritate above all because it talks about globalization, but should you not also make known the other documents?

Gotti Tedeschi: I am referring to the encyclical of Pope Benedict XVI because it contains the three key points common to all interpretations of the social doctrine of the Church: (1) to distinguish between ends and means; (2) the end is the common good; man must strive for salvation with a supernatural vision; (3) the true freedom of man is to responsibly choose to do good.

This is the path common to all Catholic social teaching.

Pope John XXIII’s encyclical Mater et Magistra spoke of a world authority, an issue often mentioned in current debates. Why not deal with it?

Gotti Tedeschi: Because in his encyclical, Pope Benedict says something much more important. What is governance? A policy of certain organizational models such as the role of governments, economic structures, etc.. But Pope Benedict says something much more important: we must rebuild the person.

Reflecting on Caritas in Veritate, I am obliged to speak of three other encyclicals. Two are mentioned explicitly, one implicitly: Humanae Vitae and Populorum Progressio.

The first chapter of Caritas in Veritate cites them and asks: Have you understood them? Have you put them into practice?

And then in Chapter 6 he mentions another encyclical of which I am very fond, and that is Sollicitudo rei socialis. The most significant part combines the conclusive vision of Benedict XVI with the prophetic vision of John Paul II when John Paul writes that the man of this century has given rise to much technology and technique, but he has not grown in parallel in wisdom and knowledge.

How can a man who has not grown in wisdom, asks John Paul II,

handle such sophisticated technology? The risk is that such sophisticated tools get out of hand. Just think of how finance got out of hand, as it multiplies the process of debt and is no longer able to control it. The same can be said for physics or medicine or bioethics. If man is not mature in his knowledge, the tools will end up out of his control.